China specialist Duncan Calder, advises Australian companies to Go To Africa to seize the benefits of Chinas massive Belt and Road Initiative - PowerPoint PPT Presentation

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China specialist Duncan Calder, advises Australian companies to Go To Africa to seize the benefits of Chinas massive Belt and Road Initiative

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Duncan Calder, respected China commentator and former National President of the Australia China Business Council (ACBC), claims that “It is a great economic tragedy that Australian companies are missing out on participating fully in the biggest game in town. For more info, visit at – PowerPoint PPT presentation

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Title: China specialist Duncan Calder, advises Australian companies to Go To Africa to seize the benefits of Chinas massive Belt and Road Initiative


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China specialist, Duncan
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Calder, advises Australian
companies to Go To Africa to seize the
benefits of Chinas massive Belt and Road
Initiative
Duncan Calder, respected China commentator and
former National President of the Australia China
Business Council (ACBC), claims that It is a
great economic tragedy that Australian companies
are missing out on participating fully in the
biggest game in town. The very scale of the BRI
in which up to AUD 10 trillion of expenditure
is expected means that some Australian
resources companies, such as the major iron ore
producers, will bene?t as suppliers but sadly
many Australian businesses will miss out. When
Premier Li Keqiang invited Australia to join the
BRI party, the Federal Government, unlike more
astute neighbour New Zealand, opted not to do
so. Failing to get us a seat at the table of the
biggest global infrastructure play of our time
the unifying Belt and Road Initiative is an
economic miscalculation of epic proportions says
Calder. Calder, who founded KPMG Australias
China Business practice at the turn of the
millennium, notes that this failure by Government
has already had negative consequences that
extend beyond the lost infrastructure
opportunities under BRI, as re?ected in the huge
reduction in Chinese investment into Australia,
which fell by a massive 40 last year. This is
a sad, but entirely predictable, consequence of
the failures of our Federal Government in recent
times to fully respect and nurture Australias
historically mutually bene?cial win-win
relationship with China, our largest customer,
Calder continued.
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Australia must not continue to be a knee jerk
partner of US foreign policy. Australia should
remember that the USA is driven ONLY by US
interests, not by those of its allies. We
shouldnt be too naïve about the motivations of
the USA and the dumbed down rationale it
presents for the trade war, which is, in truth,
about US hegemony. Professor Gareth Evans,
former foreign minister of Australia, commented
recently in a keynote address to Chinese
Community Council of Australia that We should
recognise the essential legitimacy of the scale
and ambition of the Belt and Road Initiative. I
couldnt agree more. We here in Australia need,
as a country, to protect our interests and to
respect the massive contribution being made
every day by China (and Chinese Australians) to
our economy and to the lifestyles of Australian
families as well as recognising Chinas emerging
status as a rule maker in international
relations. Sometimes our interests will involve
backing the United States, but sometimes
Australia needs to follow its own path.
Especially when the cost of not doing so is so
huge. Businesses cant wait for Federal
Government ministers who clearly are not
performing well in managing the critical
relationship with China. Australian businesses
need to engage directly with China to bring game
changing infrastructure opportunities to
Australia and to Australian companies. Whilst
it is imperative to continue to seek Chinese
collaboration in major strategic infrastructure
projects in Australia, such as the dream of
successive Western Australian governments over
decades to develop a deep water port at Oakajee
and to open up the MidWest Region of the state,
this is more challenging than it need be because
of the positions adopted by the Federal
Government. A better short term strategy for
many Australian companies to access the
mouth-watering opportunities being created by BRI
may be to look to collaborate with Chinese
companies in developing projects elsewhere around
the globe particularly in Africa. Calder,
Managing Director of advisory house Contour
Capital, sees massive bene?ts for Australian
companies in collaborating with China to develop
resources projects in Africa Australians have a
great reputation throughout Africa built on our
strengths in developing opportunities, exploring
effectively and using our geological and
engineering skills to create exciting
projects. However, investments in Africa dont
come without challenges So a partner who can
deliver political strength to protect
investments, a partner who can deliver
construction power and expertise with massive,
low-cost labour supply, and a partner who can
provide ?nancial strength and access to both
equity and low-cost large debt capital is very
welcome. And China is the perfect partner. China
brings to the table Political Muscle,
Construction Muscle and Financial
Muscle. Africa, as a whole, has close to 1
billion people not that much less than China at
around 1.3 billion people. Importantly, however,
demographics work in Africas favour, and
currently has more than 500 million people of
working age and by 2040 will have the worlds
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largest working-age population. We may be in the
century of the East, but this century also
promises much for Africa. But, it is still
enormously challenging and wretched poverty still
covers half the continent. Australian companies
bring energy, creativity, geological and
engineering know-how into Africa. Australian
companies have been in Africa for many years and
have shown they can act transparently as good
corporate and environmentally responsible
citizens. But many are junior companies, living
on their wits and exposed to the risks of project
development in Africa. China can deliver the
funding to develop the mines and associated port
and rail and power infrastructure, often on
attractive terms, especially where China sees
the opportunity to secure supply of important
commodities and to sell its engineering
capability under the BRI banner. A small
Australian resources company looking to develop a
project in Africa can be vulnerable to sovereign
risk and even project expropriation. But if that
same company is operating in joint venture or in
collaboration with a Chinese SOE, then those
risks are signi?cantly reduced. It is perhaps
not surprising that a company such as AustSino
Resources Group Limited, that is looking to raise
Chinese capital to develop infrastructure at
Oakajee in the Mid West of Western Australia is
alert to the current tensions in Sino-Australian
geopolitical relationships and has now opted,
simultaneously, to look to acquire control of
Sundance Resources which needs Chinese partners
to develop its exciting Mbalam iron ore project
in Cameroon. That move will doubtless make
Chinese authorities more receptive to allowing
Chinese capital to ?ow into the ASX-listed
AustSino. With Australian companies so active in
Africa and with China looking to fund major
infrastructure projects through BRI, there are
many compelling reasons for Australian companies
to partner with Chinese companies in developing
resources projects successfully under the BRI
policy. Duncan Calder, based in the massive
resource-rich province of Western Australia, sees
that the role of Sino-Australian advisors, like
Contour Capital, is to help Australia and
Australian resources companies to play a larger
role seizing the BRI opportunity both within
Australia as well as in Africa.
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